In its latest Global Entertainment and Media Outlook, 2024-28, PwC analysts indicate growth in advertising spend and data consumption will make UK E&M market the largest in Europe next year

A new report from PwC forecasts the UK will overtake Germany to become the largest entertainment and media market in Europe from next year.

PwC’s latest Global Entertainment and Media (E&M) Outlook 2024-2028 report has predicted revenue will break the £100 billion barrier this year, growing to £121 billion by 2028 with a compound annual growth rate (CAGR) of 4 per cent.

The report highlighted that the UK advertising market, already “the most digitally mature in Western Europe,” will strengthen its position further from this year’s £32 billion of spend to £44 billion over the next four years. This represents a CAGR of 8 per cent, one of the highest in the region.

Analysts suggested the growth will be enabled by the service sector (internet access) scaling up from £28 billion this year to £32 billion by 2028, providing the digital infrastructure to meet increased consumption. 5G mobile subscriptions are expected to rise almost threefold over the period, from 36 million to almost 100 million.

Commenting on the findings, Mary Shelton Rose, partner and UK technology, media and telecoms leader at PwC, said, “The UK entertainment & media industry has always been at the forefront of technological disruption. To capitalise on the many growth opportunities, it must leverage the power of new and emerging technologies such as GenAI, re-shape its business and creative models, and better leverage technology for advertising. So far, many of the applications of GenAI in the E&M industry have focused on speed and efficiency cost savings. As we look ahead, the industry should further explore how GenAI can lead to greater value creation through experimenting, iterating, and scaling new solutions and processes, which can be monetised to drive top-line revenue growth.

New streaming models will fuel growth

While it remains the largest in Western Europe in revenue terms (and third largest in the world behind the USA and China), the UK’s over-the-top (OTT) streaming market is facing a slower growth rate, said the report. Increasing competition and rising costs are expected to reduce to a 3 per cent CAGR over the 2024-28 period, down from 20 per cent on the 2019-24 figure. Subscriptions to OTT video services are predicted to show a 6 per cent CAGR, rising from £6.5 billion this year to £8.3 billion in 2028.

The report suggested streamers are looking to consolidate their positions and reshaping business models to find additional revenues beyond subscriptions, including the introduction of live sports, ad-based variants and cracking down on password sharing. By 2028, advertising will account for 30 per cent of UK OTT streaming revenues, said the report, rising from 24 per cent this year.

Ben Bird, entertainment and media sector leader at PwC UK, said, “Despite the OTT market being extremely competitive and mature, revenue has expanded rapidly in recent years with the market nearly doubling in size since 2020 – thanks in part to the accelerated growth experienced during the pandemic. Prices have risen for several major platforms and despite the difficult macroeconomic environment, the market has continued to flourish. Operators are leveraging their content rights and original productions to boost take up, leaving consumers needing to subscribe to multiple services or rotate platforms to access the content they desire, such as sports streaming with English Premier League football spread across three different streaming platforms. The option to have ad-supported plans is also driving growth, in some cases offering the chance to subscribe for slightly less.”